Techstars’ Elihuu Makes Move to Oakland, Lands $30K from CU Students
Colorado has been good to Elihuu, the Techstars Boulder 2013 graduate that wants to play matchmaker between a new generation of designers and manufacturers. But now the startup is moving to Oakland, CA, to capitalize on the Bay Area’s larger manufacturing industry.
Before Elihuu left, though, it got one last parting gift in the form of a $30,000 investment from University of Colorado-Boulder students.
CU made the announcement last week. The money comes from the Deming Center Venture Fund, a small venture fund that students at the Leeds School of Business manage independently.
Elihuu’s goal is to become the conduit that connects a new category of designers with traditional manufacturers. The startup is trying to capitalize on what’s called the “maker movement,” in which hobbyists, freelancers, and small firms design and develop products and put them up for sale.
With sites like Kickstarter, small companies can now generate enough pre-orders that they often need to find a reliable manufacturer that can produce their products on a much larger scale.
I spoke with CEO Dorian Ferlauto as she was driving from Colorado to California. She said the move was necessary because the Bay Area and Pacific Coast have a greater density of designers and manufacturers. Los Angeles, San Francisco, and Oakland are established manufacturing centers, and the maker movement is strong in California and along the coast, Ferlauto said.
Ferlauto founded Elihuu in Denver, and a few employees will remain there after the relocation.
Elihuu also has found an important partner in Oakland, Ferlauto said. It’s too early to identify the partner, but its identity could be announced by the end of January, she said.
Otherwise, Elihuu is living the usual life for a recent Techstars grad. The startup is putting together a seed round, which Ferlauto said should close in the next month or two. It’s also improving the website and plans to launch the new version in the next few weeks, she said.
Elihuu’s model will require it to establish connections with a large number of manufacturers and designers. So far the startup is focusing on manufacturers and is building its database of companies. In theory, designers will be easier to attract if Elihuu can give them the connections they need to see their products built.
The students who manage the Deming fund picked Elihuu after reviewing more than 100 deals and hearing 30 to 40 pitches, said Bret Fund, its faculty advisor. They were in charge of all parts of the process, from finding possible deals to conducting due diligence to making a decision.
The program’s goal is to give students the closest thing possible to the experience of an investor and to see entrepreneurs in action, Fund said. It’s an extracurricular activity, but it complements CU’s academic classes on entrepreneurship and investing, he said.
Foundry Group managing director Jason Mendelson and CU law professor Brad Bernthal teach a course on venture capital and entrepreneurship, and Fund teaches a course on entrepreneurship and private equity with Zayo Group founder and CEO Dan Caruso.
Fund said there is significant overlap in the students who take the courses and who participate in the fund.
The Deming Fund currently has four companies in its portfolio. Elihuu is the third Techstars company in that portfolio, along with Birdbox and Rapt Media (which was formerly known as Flixmaster). Students also invested in SpyderLynx.
The money in the fund comes from donations, and any profits would return to the fund for more investments.